To be honest, insurance was not something I really thought much about. Of course I held personal insurance (home, auto, etc.), but for the library? I recognized the importance of the library having a basic liability policy. As the Director, I made sure it covered if someone got hurt in the building and if, heaven forbid, the building had a fire and the contents needed to be replaced. I reviewed it annually in terms of replacement costs. But after that, I gave it very little thought. In fact, until a problem arose, I was not even aware that something called D & O insurance existed.
When the make-up of our Library Board changed, personalities shifted and perspectives clashed. Suddenly there were new situations in which it appeared that many of us, as well as the library itself, were vulnerable. It was then that I learned of Directors’ and Officers’ Liability Insurance (often called D&O). This insurance, purchased by the organization, reimburses the organization’s leadership for losses or advancement of defense costs of legal actions coming about from alleged wrongful acts in their capacity as leadership of the institution. Policies vary by the amount of coverage, but are offered by almost all of the major insurance companies. Costs are based on not only the amount of coverage, but the size of the board and institution.
At the time that I began to look into this insurance, my library was facing two possible legal actions. One stemmed from a communication problem over a fundraising event. The other involved the personality clashes of two significant individuals involved with the management of the library. It was a situation that six months earlier would have been inconceivable for all of us.
For our institution the cost increased our insurance line by approximately five hundred dollars annually. It was not an easy sell. However, the cost of one lawsuit would be far greater.
In the end, our fundraising event went off, but not without some very problematic hitches. The human conflict was a bit rougher to deal with, but fortunately it also did not end up in litigation. We were lucky that the Library Board had purchased D&O insurance. For me, it was all a little too close for comfort.
The need for such insurance—as well as the coverage—varies, and must certainly be analyzed on a per library basis. Certainly, one’s needs can be greatly affected by circumstance. Municipal libraries may be covered under town insurance policies, but might not be. What I do know definitively, is that is far better to research and discuss the options before there is a potential need. Based on our experience, I’d advise this is one of those situations where it’s better to be prepared.